Stock jump on expectations of lower US corporate taxes

NEW YORK (AP) — Stocks rallied to records Monday on expectations that lower taxes will lead to even bigger profits for companies.

Congress moved to the precipice of overhauling the U.S. tax system after the Senate narrowly approved its package of cuts over the weekend.

Stocks of companies that stand to benefit the most from lower rates jumped the highest on Monday, including smaller companies and businesses that do most of their business in the United States.

KEEPING SCORE: The Standard & Poor's 500 index rose 17 points, or 0.7 percent, to 2,659, as of 10:05 a.m. Eastern time. The Dow Jones industrial average jumped 287, or 1.2 percent, to 24,519. The Nasdaq composite was the laggard and dipped 9 points, or 0.1 percent, to 6,838.

TAX BENEFICIARIES: Smaller companies look to be some of the biggest winners from the tax overhaul because they are generally paying higher rates than their bigger rivals. The small-cap Russell 2000 index surged more than the rest of the market, gaining 22, or 1.4 percent, to 1,559.

Technology companies, meanwhile, will likely get less of a boost. They were already typically paying the lowest effective tax rates of the 11 sectors that make up the S&P 500, analysts said. So they should expect less of a windfall.

Tech stocks in the S&P 500 were flat in Monday morning trading, well behind the rest of the market. It's a very different position for the sector, which has led the market for most of this year and has nearly doubled the performance of the S&P 500.

HEALTH DEAL: Health care stocks in the S&P 500 were up modestly after CVS Health offered $69 billion to buy insurer Aetna, a combination that would touch almost every facet of patients' health care needs.

BUSY WEEK: Congress still has a packed schedule, even after the Senate pushed through its tax-overhaul vote a couple hours after midnight on Saturday morning. Washington faces a deadline on Friday to avert a shutdown of the government.

Friday is also the day when the government will release its monthly jobs report. That will be one of the last pieces of economic data that will arrive before the Federal Reserve meets next week to vote on interest rates. Many economists expect the central bank to approve the third rate increase of the year.

And hanging over everything in Washington is the investigation that continues into Russia's involvement with last year's presidential election. President Donald Trump's former national security adviser has pled guilty to lying to the FBI and has agreed to cooperate with the probe, which could threaten the agenda set by Trump and his fellow Republicans in control of Congress.

MARKETS ABROAD: European markets rallied after the chief of the European Union said he was encouraged by last-minute progress in talks for the United Kingdom to leave the group.

YIELDS: Treasury yields rose as prices for government bonds fell. The yield on the 10-year Treasury note climbed to 2.39 percent from 2.37 percent late Friday.

The two-year yield rose to 1.80 percent from 1.78 percent and reached its highest level since autumn 2008, when the financial crisis was in full effect. The 30-year yield climbed to 2.79 percent from 2.76 percent.

CURRENCIES: The dollar rose to 112.95 Japanese yen from 112.05 yen late Friday. The euro fell to $1.1842 from $1.1893, and the British pound rose to $1.3513 from $1.3468.

COMMODITIES: Benchmark U.S. crude slumped by 69 cents, or 1.2 percent, to $57.67 per barrel. Brent crude, the international standard, fell 79 cents to $62.64.

Gold dipped $4.40 to $1,277.90 per ounce, silver lost 4 cents to $43.35 and copper was close to flat at $3.10 per pound.